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'Three strikes' scheme for Aussie pirates scrapped: report

A scheme to send warning letters to alleged copyright infringers has been scrapped by telcos and rights holders because it is too costly.

The Copyright Notice Scheme Code would have seen internet service providers (ISPs) send letters to customers on behalf of film studios if they detected a user had infringed copyright by downloading content without paying for it.

The "graduated response" scheme would begin with a gentle warning to customer account holders whose IP addresses matched those of illicit downloaders, escalating to a "third strike" which could trigger legal action.

On Thursday, Village Roadshow's Graham Burke – an outspoken campaigner for anti-piracy measures in Australia – told CNET the parties had abandoned the scheme because "it was too much of an imposition to ask the ISPs, and also from our own point of view, the amount it would cost".

Those costs amounted to between $16 and $20 per infringement notice, he said, due to manual labour, making it "prohibitive" to implement the scheme."You might as well give people a DVD," he said.

Mr Burke told CNET an automated system which would only cost "cents" per notice may be available in the future.The decision follows an independent financial audit into the costs of the scheme. Fairfax Media understands the audit was completed months ago, with negotiations as to how parties would share costs stalling and fizzling out.

The Communications Alliance, representing the ISPs that would have administered the scheme, said it had not been notified by rights holders that the plan had officially been scrapped.The Alliance's chief executive John Stanton said he had "no particular reason to doubt" what Mr Burke had said, but that no decision had been communicated to the Alliance.

"There has been no formal indication from rights holders to us that they are calling off the discussions," Mr Stanton said."It's true there have been no formal negotiations so far this year – just silence [from rights holders].

Spokespeople for Foxtel and News Corp Australia – two other major rights holders which have previously supported the government's anti-piracy measures – declined to comment on Mr Burke's statements.The Communications Alliance submitted a "final" version of the industry code to the Australian Communications and Media Authority in April last year, with an implementation date slated for September 1.

By mid-year, however, there were rumblings from internal ACMA sources that the code would not be ready by the flagged date due to a lack of agreement on costs.The apparent scrapping of the scheme follows other recent developments on the piracy front in Australia.

On Thursday morning it was revealed Village Roadshow would be the first content distributor to take advantage of recently implemented website-blocking legislation, targeting an online streaming site which hosts copyrighted content.

Meanwhile, Hollywood film studio Dallas Buyers Club LLC abandoned its fight in the Federal Court to gain access to details of thousands of Australians alleged to have downloaded its film, Dallas Buyers Club, without authorisation.

An earlier court decision effectively prevented the practice of "speculative invoicing" – where rights holders send alleged pirates intimidating letters demanding large sums of compensation, or risk being sued for copyright infringement – in Australia, by making it prohibitively expensive.

The case was thrown out of court last week after the film studio failed to appeal the decision.